By Kamel Al-Harami

What else can OPEC Plus can do to stabilize the crude oil price and bring it back to an acceptable level, despite their combined efforts to reduce production?

The combined collaboration between OPEC and non-OPEC countries headed by Russia led to reducing the overall oil production by 1.2 million barrels per day initially and then by 1.5 million barrels to remove some oil surplus and to firm up the oil prices.

What can OPEC do further to bring the oil price to the level of $60 per barrel and keep it there? It seems that the oil price will not go further up, especially with more crude oils pouring into the open market.

OPEC now is facing new challenge. How can it move forward with the power of new suppliers pouring into the market from almost every part of the world? The US shale is leading this supply and topping the world production, expecting to remain unchallenged for the coming years. There are also new supplies with more volume of oil coming from new areas such as Canada, Mexico, Norway, and New Guinea, adding more than

Al-Harami

4 million barrels.

The combined volumes of new oil as well as the boycott on Iranian and Venezuela oils have given the market the confidence about the shortage of oils. The threat of boycott or shortage of Libyan oils no longer seems to represent any serious threats along with the current reductions by OPEC Plus.

In addition to the surplus oils available, the non-OPEC partner is not in harmony with OPEC’s viewpoint concerning the minimum oil price. Russia is happy with any price ranging around $45-$50 per barrel, while OPEC is looking for more, beyond even $70 crude oil price. Therefore, any further oil reduction is welcomed by non-OPEC, as it works to their full advantage but against the OPEC interest.

Today’s oil price is working to the advantage of Russia against their minimum requirements of $45 but we in Kuwait are need of oil price more than $80 per barrel, which will be impossible to achieve in many years to come, if ever.

Back to our question – where OPEC will go from now on? Who else to look and search for? Or maybe a new alliance?